What do you believe are the key factors that separate businesses that attract buyers from those that don’t?
There are a lot of great businesses that do well and have potential for growth, but that doesn’t necessarily mean those businesses are attractive for buyers.
Buyers are looking for a well packaged, well-presented entity. In particular, they want to see a clear plan for the future, as what they’re investing in is essentially future growth.
This means that they need to believe the sellers have a strong understanding of the numbers and that their forecasts are realistic and well thought through. In addition, the business needs to be able to continue to grow when the sellers leave, so continuity, succession and real IP are key factors.
How did TCC tick those boxes?
We felt a while back that we have to give TCC a chance to survive and grow beyond its founders, regardless of our personal future plans. As such, we have invested millions of rands and thousands of combined hours in focusing on converting TCC into a business that has intellectual property (IP), systems, processes, technology and infrastructure that could stand on its own and be geared for growth beyond the borders of South Africa.
Our view of TCC has always been to grow it internationally, so when Publicis approached us we saw the value they could add in terms of our expansion plans and we were ready with ideas and thoughts of how to go about expanding into Africa and emerging markets in general. We had a lot of things already worked out, which made the whole process smooth and rewarding for both parties.
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What have you put in place over the past five years that makes the company an asset of value?
Technology! We’ve embraced technology, systemising our business any which way we can. Even with that focus we’re still nowhere near where we want to be and have a long way to go. Any CEO in today’s times who doesn’t think they have a ‘long way to go’ with technology is simply living in the past.
Technology is the greatest mirage of business. As a leader you need to not only accept this, but embrace it. The rate of change is stupendous and one never really gets to terminal point, but that’s not a reason not to aim for it.
Our asset of value is the technology we have created to run our business and manage our people. It’s our analytics and business intelligence, and yet the opportunities for massive innovation are all around us.
What role have your key employees played in the success of TCC? How has this impacted the deal, and have you put any retention bonuses in place to ensure key staff members stay on?
The day we realised that staff are the key to a sustainable business, our business changed. No amount of technology could make up for unmotivated staff.
Our key staff were absolutely invaluable to the outcome of the deal. Bear in mind that a buyer wants to see strong management with good succession and motivated staff with long tenures and positive outlooks.
We have put a retention plan in place to ensure that the key people that have driven our business forward and gone on the journey with us remain with the organisation as we continue to grow within the Publicis group.
What advice would you give other business owners who are interested in selling their businesses?
First, think about why you’re interested in selling. Don’t do it for the wrong reasons. Be sure you’re clear about the kind of buyers you’re looking for and what you expect from them and what they should expect from you and from the business going forward.
Get your affairs in order. Check your corporate governance, your financials and your contracts. Run a thorough due diligence on your business and fill in the blanks. Be prepared.
Then, get yourself experts in the field who know what they’re doing. The devil is in the detail. You are a business owner and business manager, not an M&A expert. Once you start looking for a buyer (or a buyer approaches you), be careful not to let the deal divert your attention. Don’t let the business suffer when you take your eye off the ball because you’re so focused on the deal.